A Report on the Audits of the Fiscal Year 2012 Financial Statements of the Department of Transportation, the Central Texas Turnpike System, and the Texas Mobility Fund Page: 1 of 24

                                
tate
A Report on
ditor's          The Audits of the Fiscal Year 2012 Financial Statements of
office                                      The Department of Transportation,
John Keel, CPA                                 The Central Texas Turnpike System, and
State Auditor                                                     The Texas Mobility Fund
January 4, 2013
Members of the Legislative Audit Committee:
In our audit reports dated December 12, 2012, we concluded that the following financial statements were
materially correct and presented in accordance with accounting principles generally accepted in the United
States of America:
- The Department of Transportation's (Department) basic financial statements for fiscal year 2012.
- The Department's Central Texas Turnpike System's basic financial statements for fiscal year 2012.
- The Department's Texas Mobility Fund's basic financial statements for fiscal year 2012.
The Department published our audit reports in each set of basic financial statements, which it intends to post
on its Web site at:
- The Department's basic financial statements and Central Texas Turnpike System's basic financial
statements: http://www.txdot.gov/inside-txdot/forms-publications/publications/finance/reports.html.
- The Department's Texas Mobility Fund's basic financial statements:
http://www.txdot. gov/inside-txdot/forms-publications/publications/finance/mobility-fund. html.
The audit of the Department's basic financial statements for fiscal year 2012 was performed to comply with
Texas Transportation Code, Section 201.2041, which required the Department to submit an audited financial
report to the Sunset Advisory Commission prior to September 1, 2013. This was the first financial opinion
audit that the Department had received on its basic financial statements since an opinion was issued on the
Department's basic financial statements for fiscal year 1986.
We also issued a report on internal control over financial reporting and on compliance and other matters as
required by auditing standards (that report, including responses from management, is presented in the
attachment to this letter). In that report, auditors identified a significant deficiency in the Department's
control environment over financial reporting. Specifically, although the Department has made some
improvements, there are still weaknesses in its process for capturing and analyzing innovative financing
agreements. In addition, there is ineffective communication among Department offices, divisions, and
districts. Those weaknesses led to the Department making several restatements to beginning balances in its
2012 financial statements. Auditors also identified a significant deficiency in the management of access to
certain information systems that the Department uses in financial reporting.
SAO Report No. 13-016
Robert E. Johnson Building                                                   Phone:  (512) 936-9500
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Austin, Texas 78701                   Austin, Texas 78711-2067         Internet: www.sao.state.tx.us